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Indonesia eyes slices of global halal market

Indonesia, the world’s largest Muslim-majority nation, is seeking to leverage its halal business, including in tourism and the food and beverage sectors, through its participation in the 2017 Malaysia International Halal Showcase (Mihas)

Viriya P. Singgih (The Jakarta Post)
Kuala Lumpur
Fri, April 7, 2017

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Indonesia eyes slices of global halal market

I

ndonesia, the world’s largest Muslim-majority nation, is seeking to leverage its halal business, including in tourism and the food and beverage sectors, through its participation in the 2017 Malaysia International Halal Showcase (Mihas).

This year’s event, which runs from April 5 to April 8 at the Kuala Lumpur Convention Centre, expects to welcome around 25,000 visitors, up from about 22,000 visitors in 2016. This year the event hosts 580 exhibitors from 33 countries, including from South Africa, China, Thailand, Japan and Indonesia.

In 2016, the event generated 1.14 billion ringgit (US$257.3 million) in sales. This year, it offers four main clusters in its exhibition, namely food, non-food, sharia-compliant services and e-commerce.

“We’re bringing a total of 13 travel agents to Mihas. Therefore, we expect we can see at least 1,000 travel packages sold during this four-day event,” the Tourism Ministry's halal tourism development acceleration team head Riyanto Sofyan told The Jakarta Post on the sidelines of the event on Wednesday.

“By taking part in this event, we hope we can tell the whole halal ecosystem that Indonesian tourism is rising. […] Hopefully, many Muslim tourists will be attracted to visit Indonesia.”

Indonesia, the world’s biggest archipelago with more than 17,000 islands, is seeking to spur significant growth in the tourism sector in a bid to lure 20 million tourists a year by 2019, nearly double last year’s figure of around 12 million per year.

Of the total figure, Indonesia aims to welcome 5 million Muslim tourists in 2019, up from 2.5 million in 2016.

Hence, the government is currently focusing on developing 10 Muslim-friendly destinations in Indonesia, namely Aceh, West Sumatra, Lombok in West Nusa Tenggara, West Java, Jakarta, Central Java, Yogyakarta, East Java, Riau and South Sulawesi.

Of these the government has set three top priorities in its development plan: Aceh, West Sumatra and Lombok.

In the 2016 World Halal Tourism Awards, Aceh received two prominent awards, namely World’s Best Halal Cultural Destination and World’s Best Airport for Halal Travelers, which was given to Sultan Iskandar Muda International Airport.

At the same event, West Sumatra won the titles of World's Best Halal Destination and Best Halal Cuisine.

“We also want to develop a halal beach in Lombok, specifically at Senggigi beach, where areas for men and women will be separated,” Riyanto said.

Meanwhile, Indonesia’s delegation to the 2017 Mihas includes 28 small and medium enterprises (SMEs), which mostly come from the food and beverage sector.

Indonesia’s SMEs booked Rp 9 billion ($675,371) in potential orders from foreign buyers in 2016 and aims to surpass that figure this year.

“We hope that this event can pave the way for us to further market our products worldwide,” the Cooperatives and SMEs Ministry’s marketing head Agni Iswarani told the Post.

Agni said Indonesian products had often been exported and marketed under different brands in different countries, making it difficult for them to be recognized as Indonesian-made products in the global market.

Hence, he said the country had a big chance to play a major role in the global halal sector if it could strengthen its branding strategy.

The State of the Global Islamic Economy Report 2016/17 released by Thomson Reuters and DinarStandard estimates that Muslims worldwide will spend about $3 trillion in food and lifestyle goods by 2021, a significant jump from $1.9 trillion in 2015.

At the same time, the market size of Islamic finance assets is expected to soar to $3.5 trillion from $2 trillion.

However, in the same report, Indonesia is only placed 10th with 36 points in the Global Islamic Economy Indicator (GIEI), which shows the current health and development of the Islamic economic ecosystem across 73 countries.

Malaysia is at the top of the list with 121 points, followed by the United Arab Emirates and Bahrain with 86 and 66 points, respectively.

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